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Call Genie Reports Second Quarter 2010 Financial Results

August 16, 2010

Toronto, Ontario – August 16, 2010. Call Genie Inc.(TSX: GNE), a leading provider of mobile local search and advertising solutions, today announced financial results for the three and six months ended June 30, 2010.

Second Quarter 2010 Results

• Revenues recognized of $1.3 million compares to $0.6 million from the first quarter of 2010 and $0.9 million for same period in 2009. 
• Net loss for the three months ended June 30, 2010 was $3.0 million (0.04 per share) compares to $3.1 million for the same period in 2009 (0.04 per share).
• Cash used in operations was $1.8 million compares to $2.3 million for the first quarter of 2010 and $2.0 million for the second quarter of 2009.

First Half 2010 Results

• Revenues recognized of $1.9 million compares to $1.8 million for 2009. 
• Net loss for the six months ended June 30, 2010 was $6.0 million (0.07 per share) compares to $6.3 million in 2009 (0.08 per share). 
• Cash used in operations was $4.1 million compares to $5.1 million for the first six months of 2009.
• At June 30, 2010 the Company had a cash balance of $0.4 million (excluding funds received since June 30, 2010 in connection with the financing summarized below) compared to $3.5 million at December 31, 2009. 
• Deferred revenues of $4.2 million compares to $4.7 million at December 31, 2009.

$2.5 Million Debt Financing Completed

On August 13, 2010, Call Genie announced that it had distributed $1.6 million aggregate principal amount of convertible debentures (the “Debentures”) and completed a private placement of $0.9 million of straight debt.

Under the terms of the Debentures, outstanding principal will bear interest at a rate of 15% per annum, payable semi-annually, and the Debentures will mature on August 12, 2012.  At the option of the Debenture holder, principal and accrued interest under the Debentures may be converted into common shares of the Company at a conversion price of $0.10 per share. The Company has granted a security interest to Debenture holders under a general security agreement covering all of the assets of the Company and other assets made available as security by the Company’s Chairman of Board. In addition, each Debenture holder received 2,000 warrants per $1,000 principal amount of debentures.

Each warrant entitles the holder to purchase one common share of the Company, at an exercise price of $0.12, at any time prior to August 12, 2014. 

The straight debt placed by the Company bears interest at the rate of 15.0%. The Company has exercised its option to make monthly interest payments with a 2.5% interest premium with principal being repaid on August 12, 2012. The Company has the option to repay the debt prior to maturity without penalty. This debt will share in the security with the Debenture holders above on a pari passu basis. $0.6 million of the $0.9 million was advanced to the Company prior to June 30, 2010. This debt financing included participation by certain insiders of the Company including the Chairman of the Board, CEO and CFO.

FINANCIAL OUTLOOK

Mr. Michael Durance, the Company’s Chief Executive Officer, remarked, “Call Genie is well positioned in an active and emerging space.  Our financing and recent major win at France Telecom are key indicators of the Company’s vibrancy.” Durance continued, “In second half of 2010, the Company continues to expect a number of key projects to move into the commercialization phase, as a result of which the Company will begin to realize performance based reoccurring revenues. The Company is not adjusting its previously issued financial guidance at this time.”

This news release Call Genie should be read in conjunction with Call Genie’s unaudited financial statements and the accompanying notes as at and for the three and six months ended June 30, 2010 and the related Management Discussion and Analysis (“MD&A”), which have been filed with certain securities regulatory authorities in Canada and available on SEDAR (www.sedar.com) and on the Call Genie website at www.callgenie.com

About Call Genie Inc.

Call Genie is a leading global provider of local mobile search and advertising solutions that connect ready to transact consumers directly with local merchants for local directory businesses, directory assistance services and local media publishers. Call Genie solutions offer an exceptional experience for both advertisers and consumers and are deployed in 11 countries around the world.  Call Genie has been awarded the Excellence in Integrated Ad Management award by the Pelorus Group, has won the Yellow Page Association Industry Excellence Award for Marketing Innovation, the Whitaker Innovation Award, the 118 Tracker Awards for both Technology Innovation in the UK and most recently, Outstanding Contribution to the Industry. www.callgenie.com.

For More Information

Call Genie Inc.

Alex Blodgett, Investor Relations

Tel: +1 403 410-6875

Email:alex.blodgett@callgenie.com

Certain statements included in this News Release are not historical facts, but rather are forward-looking statements. Forward-looking statements (often, but not always, identified by the use of words such as “expect”, “may”, “anticipate” or “will” and similar expressions) may include plans, expectations or opinions that are not statements of fact.  Forward-looking statements are based upon the opinions, expectations and estimates of management and, in some cases, information received from or disseminated by third parties, and are subject to a variety of risks and uncertainties and other factors that could cause actual events or outcomes to differ materially from those anticipated or implied by such forward-looking statements. These factors include such things as the Company's current stage of development, its reliance on third parties and third party technology, the existence of competition, the availability of external financing, the inherent risks associated with research and development activities and commercialization of emerging technologies (such as lack of market acceptance), timing of execution of various elements of the Company's business plan, the availability of human resources, the emergence of competing business models and  new laws (domestic or foreign) and the other risk factors noted below in this paragraph. In respect of the revenue that is expected to be reported for the 12 months ending December 31, 2010, those risks, uncertainties and factors include, but are not limited to, such things as the ability of the Company to meet its contractual commitments, sufficient level of demand for services that generate performance based revenues, the ability to invoice and collect the revenues owed, the continued solvency of the Company’s customers, the ability to complete legal agreements on a timely basis, the level of transactions causing deferred revenue to be recognized increases as expected, the ability of the Company to obtain the necessary documentation required under GAAP to recognize revenue, no material change in the business terms agreed to by the Company and its customers, changes in GAAP or the Companies application of GAAP.  In respect of expectations concerning net income from operations for the quarter ended December 31, 2010, those risks, uncertainties and factors include, but are not limited to, such things as the ability of the Company to meet its contractual commitments, sufficient level of demand for services that generate performance based revenues, the ability to invoice and collect the revenues owed, the continued solvency of the Company’s customers, the ability to complete legal agreements on a timely basis, the level of transactions causing deferred revenue to be recognized increases as expected, the ability of the Company to obtain the necessary documentation required under GAAP to recognize revenue, no material change in the business terms agreed to by the Company and its customers, changes in GAAP or the Company’s application of GAAP, risk factors noted below affecting the Company’s ability to maintain quarter cash expenses. In respect of the number and impact of key customer projects expected to move into the commercialization phase in the second half of 2010, resulting in the Company earning performance based revenues, those risks, uncertainties and factors include, but are not limited to, such things as the ability of the Company to meet its contractual commitments, sufficient level of demand for services that generate performance based revenues, the ability to invoice and collect the revenues owed, the continued solvency of the Company’s customers, the ability to complete legal agreements on a timely basis, the level of transactions causing deferred revenue to be recognized increases as expected, the ability of the Company to obtain the necessary documentation required under GAAP to recognize revenue, no material change in the business terms agreed to by the Company and its customers, changes in GAAP or the Company’s application of GAAP.

 

Call Genie Inc. does not assume responsibility for the accuracy and completeness of the forward-looking statements set out in the news release and, subject to applicable securities laws, does not undertake any obligation to publicly revise these forward-looking statements to reflect subsequent events or circumstances.  Call Genie Inc.’s forward-looking statements are expressly qualified in their entirety by this cautionary statement.  Additional information relating to various risk factors to which Call Genie is exposed in the conduct of its business (and which may affect the expectations or outcomes reflected in the forward-looking statements contained in this news release) are described in the Company's quarterly MD&A for the three and six months ended June 30, 2010, which has been filed with certain securities regulatory authorities in Canada and is available through SEDAR, at www.sedar.com.